Trade Problem Set 90 2-8

1. When trade policies are implemented it is common to refer to it as “protectionism.” Why? Explain briefly.

2. Does trade theory suggest that trade liberalization by a small importing country will make everyone in the country better-off? Why or why not? Explain briefly.

3. If a country implements an import quota with identical price effects, instead of a tariff, what can the govenment do to assure that the distribution of the gains and losses remains exactly the same? Explain briefly.

International Trade Theory and Policy - Chapter 90: Last Updated on 1/06/08